7 Reasons Your Business Needs Direct Debit Payments
With over 36 million debit cards in circulation Australia wide, it's pretty clear that we Aussie's love our direct debits. And if your business doesn't offer them, you are missing out on your share of the $2.7 trillion in direct debit payments made each year!
Choosing direct debit is ideal for businesses looking to streamline their payment processing. These pre-authorised payments are paid directly and consistently to your business straight from the customer's bank account, making life easier for everyone. Not to mention they also offer some of the lowest payment fees out there!
Read on to discover seven of the top benefits you can enjoy when you switch to accepting direct debits:
1. Direct Debits Improve Cash Flow
For businesses that are looking to improve cash flow, direct debit solutions are an excellent choice.
As a business owner, you know how frustrating late payment can be. It disrupts your company's cash flow (especially if you're running a small business that's still getting on its feet) and prevents you from planning for the future. After all, if you don't know when the payment's going to come in, how can you know when you'll be able to pay bills, buy new inventory, etc.?
Improving your payment process with Direct debit allows for more consistent cash flow. It also gives you peace of mind because you'll always know when customer payments are arriving.
With over 38 million debit cards in circulation Australia wide, it’s pretty clear that we Aussie’s love our direct debits.
2. Direct Debits Reduce Admin Time
How much time do you spend each month keeping track of payment collection? Whatever amount of time you're spending, you could slash it significantly by setting up a direct debit payment gateway.
Direct debit automates many of your payment tracking processes. With the right tool, you'll have a built-in record of all your payments, too. You won't need to worry about manually managing your money. This is especially helpful if your business offers a service that requires recurring payment.
3. Direct Debits Increase Payment Security
Payment security is a top priority these days. This is particularly true among businesses that offer online payment processing.
If you've been hesitant about pulling the trigger on direct debit payments because you worry about security, you can rest easy.
Direct debit is highly secure and reliable. It's quickly becoming one of the top payment methods in Australia, and millions of businesses use it every day without running into any challenges (including security-related issues).
As long as the system you choose is PCI-compliant, you likely won't experience any security problems.
4. Direct Debits Increase Customer Retention
Customer retention is key to growing your business. After all, it's 5 times more expensive to recruit a new customer than it is to retain an existing one.
One way that you can increase your company's customer retention rate is by setting up direct debit scheme.
When customers can easily set up, maintain, and renew a recurring payment over an extended period, they're more likely to stick with you. If you can make their lives easier by saving them from manually inputting their information every time they need to place an order, they'll be your loyal customers for a long time.
5. Direct Debits Give You More Flexibility
A direct debit setup allows you to enjoy a greater amount of flexibility, too.
Direct debit lets you change customer payment frequency, payment amounts, and more - without your customers having to re-authorise each time. This saves you from a lot of administrative headaches whenever you need to factor in things like price changes or variable product amounts.
Direct debit creates more flexibility for your customers as well. If they need to change a payment date to accommodate their next payday or their travel schedule, they can easily do so when you use a direct debit payment gateway.
It’s 5 times more expensive to recruit a new customer than it is to retain an existing one.
6. Direct Debits Reduce Payment Failures
What's wrong with only accepting credit and debit card payments? Well, there's a greater chance that these types of payments will result in a failed payment each month. This might be due to card expirations, card cancellations, or any number of other issues. Resulting in you wasting time and resources chasing payments.
The great thing about using direct debit as your payment solution, on the other hand, is that it is connected to a customer's bank account and relies on these details.
Bank account details do not expire or change as frequently as credit and debit card details. Because of this, failure rates when drawing the funds from their nominated account are very low - practically non-existent.
7. Direct Debits Are Easy To Set Up!
If you're still a little hesitant about switching to direct debit, what's holding you back? Is it because you're unsure of how to set up a direct debit or worried that it'll be time-consuming or expensive?
The good news is that it's simple and painless to set up and start using a direct debit service gateway, especially when you partner with a direct debit provider like PayChoice.
PayChoice allows you to easily set up direct debit payments in just a few steps.
After you've selected them as your direct debit provider (and why wouldn't you, as they accept a variety of payments types, have extremely low fees, and integrate with a variety of other tools?), you can send your customers a direct debit request form.
Once the customer has completed the direct debit authority, you'll get the information authorised through PayChoice. Then, you'll set up the frequency and payment amount to be deducted from the customer's nominated account.
All you need to do from here is send customers a transaction reminder to let them know when the money will be taken out.
It's that simple!
Set Up a Direct Debit Payment Gateway Today
Now that you know more about the benefits of accepting direct debit payments - not to mention how easy it is to get started - are you ready to take the plunge and set up an Australian payment gateway?
If so, PayChoice is the perfect direct debit solution. We've helped more than 3,000 businesses grow and increase their cash flow, and we can't wait to help you, too! Sign up today to learn more.